In an effort to ease pressure on the operators, the Central Bank of Nigeria (CBN) has lowered the lending to deposit ratio threshold for deposit money banks (DMBs) to 50%.
In a circular headed “Re: Regulatory Measures to Improve Lending to the Real Sector of the Nigerian Economy,” the apex bank informed banks that it has reduced the loan to deposit ratio from 65% to 50%.
The most recent action taken by the current governor of the CBN, Yemi Cardoso, revoked the prior barrier that Godwin Emefiele had established in January 2020.
According to analysts, the downward assessment of LDR would relieve pressure on lenders given other stringent mandates, such as the Net Open Position (NOP) ceiling of 20.0% short and 0.0% long, and allow banks to comply with the 45.0% CRR directive.
